Question: PLEASE HELP ME! I've posted this already but it got cancelled because tutors said it had missing information / data - however that isn't actually

PLEASE HELP ME!

I've posted this already but it got cancelled because tutors said it had missing information / data - however that isn't actually the case - this is ALL the information I have been provided me!

I would really appreciate some help with this task because I only have a few hours left until our assessment and I really want to have this revision task done!

The attached photo sets the scenario:

PLEASE HELP ME! I've posted this already but it got cancelled because

Consider an open economyr {call it domestic country) that operates under the exible exchange rate regime. We approximate net experts with NX = dlY' de + data, where l" is foreign output, 1' is domestic output, and c is the real exchange rate. Parameter d3 summarizes the net effect of real exchange rate on net exports, and d: and .112 are both positive, Consumption and investmem are respectively C = on + nu" T} and i = inf b2r, where T is net tax and r is the real policyr interest rate. We assume that if; a: {1 + b1) :2: 1. In addition, let G be govenunent spending. The domestic-foreign relative price is constant and normalized to one (PfP' = 1), implying that actual and expected ination rates are zero. Nominal exchange rate is given by the uncovered interest parity condition, E = (l + i - t\" )E

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!